The Obama administration said the private sector will still play a major role in servicing the loans, and Democrats may even see a political benefit from the fight.
While health care reform was a difficult political sell, a CNN/Opinion Research Corp. poll late last week found that 64 percent of those surveyed - including a slight majority of Republicans - approved of the change to have the government directly provide loans.
But many in the industry are bracing for the worst.
Edamerica’s Ms. Lubimtsev estimated the industry could see some 30,000 jobs lost because of the changes. Student-loan giant Sallie Mae has said that the overhaul law will lead to major internal consolidations and layoffs of more than a quarter of its 8,600 employees.
Apart from losing jobs, Ms. Lubimtsev said that private lenders were concerned for the schools and students.
“We see some bit of a disregard for our schools,” she said. “We continue to stay in the mix, and we’re trying to work with all of our lawmakers to make sure that this bill brings some fairness to students and colleges and universities.”
She said the only positive aspect of the reform is the increase in Pell Grant money. But she added that that “didn’t have to come [at the] expense of the industry.”